Correlation Between Calibre Mining and GEAR4MUSIC
Can any of the company-specific risk be diversified away by investing in both Calibre Mining and GEAR4MUSIC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Calibre Mining and GEAR4MUSIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calibre Mining Corp and GEAR4MUSIC LS 10, you can compare the effects of market volatilities on Calibre Mining and GEAR4MUSIC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Calibre Mining with a short position of GEAR4MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and GEAR4MUSIC.
Diversification Opportunities for Calibre Mining and GEAR4MUSIC
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calibre and GEAR4MUSIC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and GEAR4MUSIC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEAR4MUSIC LS 10 and Calibre Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Calibre Mining Corp are associated (or correlated) with GEAR4MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEAR4MUSIC LS 10 has no effect on the direction of Calibre Mining i.e., Calibre Mining and GEAR4MUSIC go up and down completely randomly.
Pair Corralation between Calibre Mining and GEAR4MUSIC
Assuming the 90 days trading horizon Calibre Mining Corp is expected to generate 0.97 times more return on investment than GEAR4MUSIC. However, Calibre Mining Corp is 1.03 times less risky than GEAR4MUSIC. It trades about 0.08 of its potential returns per unit of risk. GEAR4MUSIC LS 10 is currently generating about 0.06 per unit of risk. If you would invest 137.00 in Calibre Mining Corp on August 29, 2024 and sell it today you would earn a total of 35.00 from holding Calibre Mining Corp or generate 25.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calibre Mining Corp vs. GEAR4MUSIC LS 10
Performance |
| Timeline |
| Calibre Mining Corp |
| GEAR4MUSIC LS 10 |
Calibre Mining and GEAR4MUSIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calibre Mining and GEAR4MUSIC
The main advantage of trading using opposite Calibre Mining and GEAR4MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining position performs unexpectedly, GEAR4MUSIC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GEAR4MUSIC will offset losses from the drop in GEAR4MUSIC's long position.| Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc |
| GEAR4MUSIC vs. Amazon Inc | GEAR4MUSIC vs. Amazon Inc | GEAR4MUSIC vs. Alibaba Group Holdings | GEAR4MUSIC vs. JD Inc Adr |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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